The paper claims ministers such as Sajid Javid and Work and Pensions Secretary David Gauke were among those who urged Mr Hammond to embrace a more ambitious approach.

Among policies under consideration is letting councils borrow more to build houses and loosening restrictions on the Green Belt - a move that would be fiercely opposed by some Tory backbenchers in rural areas.

Mr Hammond is also considering writing off student loans in a bid to make the Tories more attractive to younger voters, who were much more likely to favour Labour at the recent general election.

A senior government source told the Sunday Times: “Philip has said that we have to have a radical budget, something that is a big offer to the nation.

"It means memorable stuff that changes thinking and changes peoples’ futures. Pre-conference there was very much a view that it had to be a safety first budget. Now the view has galvanised that this budget has got to be big, it’s got to be powerful, it’s got to be revolutionary. Saying it’s got to be brave is really understating it. People are very clear that this is basically the last chance.”